Transatlantic Holdings, Inc. Responds to National Indemnity Proposal

Board Determines National Indemnity Proposal Does Not Constitute
Superior Proposal

Board Determines National Indemnity Proposal Reasonably Likely to
Lead to Superior Proposal

August 08, 2011 06:54 PM Eastern Daylight Time

NEW YORK--(BUSINESS WIRE)--Transatlantic Holdings, Inc. (NYSE: TRH) (“Transatlantic”) today
announced that its Board of Directors, after consultation with its
independent financial and legal advisors, has determined that the
proposal set forth in the letter received on August 5, 2011 from
National Indemnity Company (“National Indemnity”), a member of the group
of insurance companies of Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B),
to acquire all of the outstanding shares of Transatlantic common stock
for $52.00 per share does not constitute a Superior Proposal, but is
reasonably likely to lead to a Superior Proposal, under the merger
agreement that Transatlantic entered into with Allied World Assurance
Company Holdings, AG (NYSE: AWH) (“Allied World”) on June 12, 2011 (the
“Allied World Merger Agreement”), and that the failure to enter into
discussions regarding the National Indemnity proposal would result in a
breach of its fiduciary duties under applicable law.

As a result, the Transatlantic Board determined to offer to engage in
discussions and to exchange information with National Indemnity. While
the Board determined that the National Indemnity proposal is reasonably
likely to lead to a Superior Proposal, there can be no assurance that
the National Indemnity proposal will result in a Superior Proposal or
that any transaction with National Indemnity will result from the
National Indemnity proposal or Transatlantic’s discussions with National
Indemnity.

Pursuant to the Allied World Merger Agreement, prior to entering into
discussions with, or providing information to National Indemnity,
Transatlantic must provide Allied World with three business days’ notice
(which notice period expires at the end of the day on August 11, 2011)
of its intent to furnish information to or enter into discussions with
National Indemnity. Transatlantic must also obtain from National
Indemnity an executed confidentiality agreement containing terms that
are substantially similar, and not less favorable, to Transatlantic, in
the aggregate, than those contained in the confidentiality agreement
between Transatlantic and Allied World. Transatlantic expects to make
such confidentiality agreement available to National Indemnity
subsequent to the end of the three business day notice period to Allied
World.

As previously announced, Transatlantic entered into the Allied World
Merger Agreement, pursuant to which Transatlantic and Allied World would
combine in a merger of equals, with stockholders of Transatlantic
receiving 0.88 Allied World common shares for each share of
Transatlantic common stock (together with cash in lieu of any fractional
shares). The Transatlantic Board reaffirms its recommendation of, and
its declaration of advisability with respect to, the Allied World Merger
Agreement.

Transatlantic Holdings, Inc. is a leading international reinsurance
organization headquartered in New York, with operations on six
continents. Its subsidiaries, Transatlantic Reinsurance Company®,
Trans Re Zurich Reinsurance Company Ltd. and Putnam Reinsurance Company,
offer reinsurance capacity on both a treaty and facultative basis ―
structuring programs for a full range of property and casualty products,
with an emphasis on specialty risks.

Additional Information about the Proposed Merger with Allied World
and Where to Find It

Allied World has filed with the Securities and Exchange Commission
(“SEC”) a registration statement on Form S-4 that includes a preliminary
joint proxy statement of Transatlantic and Allied World that also
constitutes a prospectus of Allied World in connection with a proposed
merger between Transatlantic and Allied World. This communication is not
a substitute for the joint proxy statement/prospectus or any other
document that Transatlantic or Allied World may file with the SEC or
send to their stockholders in connection with the proposed merger. Investors
and security holders are urged to read the registration statement on
Form S-4, including the preliminary joint proxy statement/prospectus
filed and other relevant documents that will be filed with the SEC
(including the definitive joint proxy statement/prospectus), as they
become available because they will contain important information about
the proposed merger. All documents, when filed, will be available
free of charge at the SEC’s website (www.sec.gov).
You may also obtain these documents by contacting Transatlantic’s
Investor Relations department at Transatlantic Holdings, Inc., 80 Pine
Street, New York, New York 10005, or via e-mail at investor_relations@transre.com;
or by contacting Allied World’s Corporate Secretary, attn.: Wesley D.
Dupont, at Allied World Assurance Company Holdings, AG, Lindenstrasse 8,
6340 Baar, Zug, Switzerland, or via e-mail at secretary@awac.com.
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of any
vote or approval.

Additional Information About the Validus Exchange Offer

This communication is neither an offer to purchase nor the solicitation
of an offer to sell any securities. In response to the exchange offer
commenced by Validus, Transatlantic has filed a
Solicitation/Recommendation Statement on Schedule 14D-9 with the SEC. Investors
and security holders are urged to read the Solicitation/Recommendation
Statement on Schedule 14D-9 because it contains important information
about the Validus Exchange Offer. All documents, when filed, will be
available free of charge at the SEC’s website (www.sec.gov).
You may also obtain these documents by contacting Transatlantic’s
Investor Relations department at Transatlantic Holdings, Inc., 80 Pine
Street, New York, New York 10005, or via e-mail at investor_relations@transre.com.

Participants in the Solicitation

Transatlantic, Allied World and their respective directors and executive
officers may be deemed to be participants in any solicitation of proxies
in connection with the proposed merger. Information about
Transatlantic’s directors and executive officers is available in
Transatlantic’s proxy statement dated April 8, 2011 for its 2011 Annual
Meeting of Stockholders and the preliminary joint proxy
statement/prospectus on Form S-4/A related to the proposed merger, which
was filed by Allied World with the SEC on August 5, 2011. Information
about Allied World’s directors and executive officers is available in
Allied World’s proxy statement dated March 17, 2011 for its 2011 Annual
Meeting of Shareholders and the preliminary joint proxy
statement/prospectus on Form S-4/A related to the proposed merger, which
was filed with the SEC on August 5, 2011. Additional information
regarding the participants in the proxy solicitation and a description
of their direct and indirect interests, by security holdings or
otherwise, to the extent applicable, will be contained in the definitive
joint proxy statement/prospectus and other relevant materials to be
filed with the SEC regarding the merger when they become available.
Investors should read the joint proxy statement/prospectus carefully
before making any voting or investment decisions.

Cautionary Note Regarding Forward-Looking Statements

This communication contains forward-looking statements that involve a
number of risks and uncertainties. Statements that are not historical
facts, including statements about our beliefs and expectations, are
forward-looking statements. Such statements involve risks and
uncertainties, which may cause actual results to differ materially from
those set forth in these statements. For example, these forward-looking
statements could be affected by the occurrence of any event, change or
other circumstances that could give rise to the termination of the
merger agreement; the inability to obtain Transatlantic’s or Allied
World’s stockholder approval or the failure to satisfy other conditions
to completion of the proposed merger with Allied World, including
receipt of regulatory approvals; risks that the proposed merger disrupts
current plans and operations; risks that the unsolicited Validus
exchange offer and/or National Indemnity proposal disrupts current plans
and operations, including the proposed merger; the ability to retain key
personnel; the ability to recognize the benefits of the proposed merger;
the amount of the costs, fees, expenses and charges related to the
proposed merger, the Validus exchange offer and the National Indemnity
proposal; pricing and policy term trends; increased competition; the
impact of acts of terrorism and acts of war; greater frequency or
severity of unpredictable catastrophic events; negative rating agency
actions; the adequacy of loss reserves; changes in regulations or tax
laws; changes in the availability, cost or quality of reinsurance or
retrocessional coverage; adverse general economic conditions; and
judicial, legislative, political and other governmental developments, as
well as management’s response to these factors; and other risks detailed
in the “Cautionary Statement Regarding Forward-Looking Information,”
“Risk Factors” and other sections of Transatlantic’s Form 10-K and other
filings with the SEC. You are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date on
which they are made. Transatlantic is under no obligation (and expressly
disclaims any such obligation) to update or revise any forward-looking
statement that may be made from time to time, whether as a result of new
information, future developments or otherwise, except as required by law.